043 | 7 Financial Principles To Live By | Budget Hack Of The Week | "What Do I Do With My Extra Money?"

049 | Bitcoin ETF's | How Do I Create Generational Wealth? | Tecate or Sol?

We’re back!!!

Today going to do a deep dive into Bitcoin ETFs

Money Hack of the Week: Cancel unused subscriptions.

Go to settings on iphone, click your name, tap subscriptions to review active subs

Amazon: Accounts and lists: Other subscriptions

Check your credit card statements

Main Topic: The Bitcoin ETF

• What is it?

• A way to buy into BITCOIN without opening a crypto wallet.

• Nice thing about an ETF is that it’s like owning a security

• Will get 1099 tax statements - don’t need to track on your own

• Also - very secure. REGULATED

• Essentially you’re buying into a fund that owns the bitcoin. The price of the ETF fluctuates just like the price of bitcoin.

• What are some of the best Bitcoin ETF funds?

• Is it safe?

• Do we think Bitcoin will go up in value?

• Will institutional investors drive the price up?

• Range in cost (expense ratio) from .19% to 1.5%

• Franklin Bitcoin ETF EZBC - .19% E.R.

  
  

  Bitwise Bitcoing ETF - BITB -.2% E.R.

  
  

  These funds essentially just hold Bitcoin in a coinbase account

  
  

  Questions that need answers

  -PLEASE WRITE US AT [email protected]

  • What are some strategies for listeners to build and pass on generational wealth, ensuring financial stability for future generations?

  • I have a 401k at work - what should I invest in to stay diversified- what’s best?

  
  

048 | Average And Median Net Worth By Age - How Do You Stack Up?

Money Hack of the Week: Diversify your assets

• Is your net worth all in stocks? All in real estate? All in your company’s stock? Do you own bonds?

• If you’re all in stocks - do you own all US based investments or do you also have international investments?

• Take a hard look at your net worth - see if it may make sense to diversify your assets a bit.

• While we love real estate, I don’t have all of my assets in real estate, we also own stocks, both domestic and international.

Main Topic - Net worth by Age

• What is net worth? Assets - Liabilities

• Why is this important - helps you determine if you’re on track for retirement

• How to track Net Worth - episode 1 - show notes

• Net worth is not your personal worth

Average Net Worth By Age

Age -- Average net worth -- 4% Rule

Under 35 - $76,300 - $3,052.00

35–44 - $436,200 - $17,448.00

45–54 - $833,200 - $33,328.00

55–64 - $1,175,900 - $47,036.00

65–74 - $1,217,700- $48,708.00

75+ - $977,600 - $39,104.00

Median Net Worth by Age

Age -- Median net worth

Under 35 - $13,900

35–44 - $91,300

45–54 - $168,600

55–64 - $212,500

65–74 - $266,400

75+ - $254,800

Action Step: Do you know your net worth? If not, download a copy of the net worth tracker on our website under the show notes - episode 1 - track your net worth and make sure you’re making progress toward your financial goals.

047 | How Do I Get Out Of Debt? | Most Effective Ways To Pay Off Debt

Money Hack of the Week: Automate savings and investments

• Did you know most millionaires automate savings and investments?

• Did you know you can set up multiple direct deposit accounts with your employer to “force savings” for yourself?

• You can also have multiple savings accounts with companies like ally bank and set up automatic transfers on a weekly/monthly basis 

Main Topic

• Getting out of debt!  

• 1st - need to analyze how we got here in the 1st place

• Can you increase your income?  

• Look for opportunities to grow inside your organization - or if you’re a business owner, are there additional products/services you can offer to increase your cash flow? 

• Monthly budget is key - need to free up $$ to be able to live below your means.

• Consider a side gig - temporarily to help you get out of debt

• Drive for uber, make arts and crafts, shop for instacart, do doordash.  Do something that will generate a little extra money if you’re unable to come up with extra money within your monthly budget.

Other things to note:

• Debt consolidation (personal loan to decrease credit card debt)

• Credit card transfers

• 2 main concepts to getting out of debt: Debt snowball, debt avalanche

Here's how the Debt Snowball works:

1.    List Your Debts: Begin by making a comprehensive list of all your debts, including credit cards, personal loans, student loans, and any other outstanding balances. Arrange them from the smallest balance to the largest.

2.    Minimum Payments: Continue making minimum payments on all your debts to avoid penalties and late fees.

3.    Focus on the Smallest Debt: Allocate any extra money or funds you can towards the smallest debt on your list while maintaining minimum payments on the others.

4.    Pay Off Smallest Debt: Once you've paid off the smallest debt, celebrate this accomplishment! The key to the Debt Snowball method is the psychological boost you get from achieving these small victories.

5.    Roll Over Payments: Now that the smallest debt is paid off, take the money you were using to pay it off and add it to the minimum payment of the next smallest debt on your list.

6.    Repeat and Build Momentum: Continue this process, "snowballing" your payments from one debt to the next as each one is paid off. As you progress, your ability to pay off larger debts increases, creating a momentum that keeps you motivated throughout the debt repayment journey.

The Debt Snowball method emphasizes the importance of behavior and motivation in paying

off debt. While it may not be the most mathematically optimal strategy in terms

of interest savings (compared to the Debt Avalanche method), its psychological

benefits can be highly effective in helping individuals stay committed and focused on their debt repayment goals.

Here's how the Debt Avalanche works:

1.    List Your Debts: Start by making a list of all your debts, including credit cards, personal loans, student loans, and any other outstanding balances. Arrange them from the highest interest rate to the lowest.

2.    Minimum Payments: As with any debt repayment plan, continue making minimum payments on all your debts to avoid penalties and late fees.

3.    Focus on the Highest Interest Debt: Allocate any extra money or funds you can towards the debt with the highest interest rate while maintaining minimum payments on the others.

4.    Pay Off Highest Interest Debt: Once you've paid off the debt with the highest interest rate, take the money you were using to pay it off and add it to the minimum payment of the next debt on your list with the next highest interest rate.

5.    Repeat and Save on Interest: Continue this process, "avalanching" your payments from one debt to the next based on their interest rates. By targeting the high-interest debts first, you reduce the overall amount of interest you'll pay over time.

-PLEASE WRITE US AT [email protected] 

046 | "Should I Buy A House With High Interest Rates Or Wait?" | Celebrating A Listener Win

Money Hack of the Week: Sim Swapping

https://clark.com/cell-phones/sim-card-swapping/

SIM swapping, or a SIM swap scam, happens when a crook is able to take control of the personal information stored on your SIM card by using it on another phone.

According to the Federal Trade Commission (FTC), a successful SIM swap can occur if a scammer impersonates you and contacts your phone service provider with a bogus story.

According to the FTC’s website, “They may call your cell phone service provider and say your phone was lost or damaged. Then they ask the provider to activate a new SIM card connected to your phone number on a new phone — a phone they own.”

Once scammers successfully take over your phone, they can access your bank account, social media accounts, email account and more. How? While two-factor authentication is typically a decent form of protection, the scammer now has access to your phone number and email. That means they have access to any codes sent through an email or text message.

What can you do?

• Depending on which carrier you have - you can essentially lock down your SIM. 

• Head to Clark Howards website via the show notes link we have in the show notes to read how to lock down your SIM.

• I am with T-Mobile - they have a process known as SIM Locking in which I have enabled to ensure nobody can get access to my SIM without me knowing. 

Main Topic

Should you buy a house with today’s interest rates, or is it better to just wait?

What is the current rate: Somewhere between 7.2 and 7.9% depending on if you go VA, conventional or FHA

What is the historical 30 year rate?

• 7.75% - as of right now we sit at 7.25% as of this recording

First off - Let’s talk about why rates are higher

• Inflation

• Federal reserve raising rates to cool buying and help strengthen the dollar

• When rates go up, it's more expensive to borrow and people are incentivized to save because savings rates increase.

If you are thinking of buying a house, you are probably well aware that interest rates have a direct correlation with how much home you can afford.

• A 500,000 loan at a 3.25 interest rate - which you could get about a year ago would be a $2,175 P&I Payment

• A 500,000 loan at a 7.25 interest rate is $3,411 = 1,200 more for the same priced house per month.

So with a $1,200 difference on a 500k house - what are the pros and cons to buying now?

Pros:

• If you can afford the house and the payment fits with your monthly budget, it allows you to purchase a home at today’s prices

• Prices could go up or down - but real estate tends to increase in price by at least the rate of inflation on an annual basis.

• You get to start paying down the loan immediately

• If you wait - you are paying someone else’s principle payment for them.

• If you plan on staying the home a long time - even if values decrease in the short term, it likely won’t matter by the time you go to sell.

• We have a supply of housing problem still in the USA. 

• If interest rates decrease - you can always refinance and pay less of a monthly payment.

Cons:

• You are locking in a “high” rate relative to what rates have looked like in the last few years. 

• Can’t predict if rates will go up or down.

• Property values are up in many parts of the country.  

• Nobody can predict where property values in the future

• Loans are not where they were in 08 and 09 when banks were loaning people money with “stated” income and interest only loans. 

• People feel like we could be sliding into a recession which could decrease housing prices

• This is speculation

So would we buy a house right now if we were in the market - or would we wait?

• Solid credit score  = 720 or more

• You have a monthly budget and you’re living and giving on less than you make

• You have money in an emergency fund - for maintenance costs

• Your debt is manageable

• You have the money for a down payment.

• You’re steady in your career and relationship

• You know what you want

Then it’s probably time to go ahead and buy that house!

045 | Airbnb Investing and STR Strategies - Part 2 | What Happened to FTX? | Choosing a Career Path

Money Hack of the Week: 30 Day financial audit / challenge - put in spreadsheet/categorize it

What type of investor are you?

• Co-host- someone who is managing someone else’s property and is taking a management fee.  Management fees are typically between 25-35% and you manage marketing, guest communication, cleaners, maintenance, etc….
  • Great way to have a side hustle that is super flexible in nature.  Generally when a property is automated, it only takes 2-4 hours a week to manage the property.
• Rental Arbitrage- Rent from a landlord and sublease on Airbnb to guests.
  • Downsides are - landlord can terminate lease and Upfront cost of furnishing without guarantee of long term lease
• Buy and Hold - buying a house/condo/apt and renting it out on Airbnb.  Capture the long term appreciation and the short term cash flow.

General:

• Invest in a training program.  This is truly a business - learn from someone who has already done it.  It may cost you $1k to $2k to buy into a coaching program, but it’s 100% worth it.  It will dramatically expedite the learning process.
• Make sure the local county and city allow short term rentals
• Avoid HOA’s if possible as they could ban STR’s.
• Look for unique homes

Evaluating an investment property:

• Have an investment analysis spreadsheet - can get these from others for free online
  • With this spreadsheet, it will take an all encompassing view of all the expenses you need to think about when operating a short term rental.
    • Will include mortgage, set up costs, down payment, monthly maintenance, utilities, trash, TV, Internet, HOA, Landscaping, etc…
• Air DNA, STR insights, Data Rabu
  • These are tools that scrape the data from Airbnb/VRBO and forecast how current and active STR’s are doing that are on the market.  This can help you get a gauge on what is possible from a revenue standpoint.
  • Help to forecast how much a home can make on Airbnb
• Cash on cash return:
  • Using an investment analysis spreadsheet, calculate your cash on cash return - this is the number of years it will take to get your money invested back.  Typically - 25% or better is a good cash on cash return.  That would mean you would get all your money back on the investment within 4 years, and then from there you’re just making profit.